EU's Plan to Align With US Steel Tariffs Poses 'Survival Risk' to British Steel Sector

The European Union have announced plans to mirror Donald Trump's steel tariffs, effectively doubling levies on imports to 50% in a decision condemned as "a survival risk" to the sector in the UK.

Unprecedented Crisis for British Steel Industry

With eighty percent of UK steel shipments destined for the EU, this policy shift creates the UK steel industry's largest challenge, as stated by the lobby group speaking for the industry.

European Commission Proposals and Rules

Through its proposal submitted to the EU legislature on Tuesday, the EU executive additionally suggested reducing the existing quota for duty-free imports and obliging foreign suppliers to state where the steel was melted and poured to prevent Chinese producers sneaking products in through other countries.

EU steel sector stood at the brink of failure – these measures safeguard it so that it can invest, decarbonise, and regain competitiveness.

Replacement of Existing System

The proposals are designed to supersede a quota system that has been functioning for the past seven years and which is set to expire in 2026 and is now seen as ineffective. Inaction could have been "disastrous" for the industry, a European official stated.

Sector Reaction and Warnings

Nevertheless, Gareth Stace, head of the industry body British Steel, stated Brussels increasing duties would pose "the biggest crisis the UK steel industry has encountered".

There were calls for the government to "recognise the critical necessity to implement domestic protections to protect" the UK steel industry – which is still reeling from a 25% tariff imposed by the US recently – from the risk of vast quantities of global steel diverted away from US and European markets.

This flood of imports "could be fatal for many of our remaining steel companies.

Labor and Government Calls

Alasdair McDiarmid, assistant general secretary at steelworkers' union the industry union, said the new measures posed "a survival risk" to British steel production.

Unions and industry leaders urged the UK government to start negotiations immediately with the European Union on country-specific duty-free quotas, pointing out that the United Kingdom was now the European Union's primary export market.

Broader Context

Industry leaders in the European Union have repeatedly cautioned for months that the European steel sector confronts being "eliminated" through the increased duties on exports to the US combined with high energy costs and low-cost Chinese imports.

Steel on in both the UK and EU is considered a essential sector, providing elemental components in products ranging from building frameworks, wind turbines and transport infrastructure to dishwashers and kitchenware.

Adoption and Next Steps

These proposals require approval by EU nations and the EU legislature, with the EU executive head calling on member states and European parliament members to move quickly in support of the initiative.

Should approval be granted, the European Union will cut its existing tariff-free allowance by 47% to 18.3m tonnes a year, a level last seen in 2013. It will impose a fifty percent duty on foreign steel beyond the quota and require nations shipping to the EU to state the production origin to avoid bypassing of the measures.

Exemptions and Global Partnerships

Norway, Iceland, and Liechtenstein will not be subject to import limits or tariffs because of their close trading relationship in the EEA, the European Union has said.

Alongside the proposal, the European Union is pursuing a "metals alliance" with the United States to protect their respective economies from overcapacity.

EU needs to act now, and decisively, prior to operations cease in large parts of the European steel sector and its value chains.